Benefits consolidating systems
This potentially significant up-front investment would allow the employer to discharge their legacy liabilities, and concentrate on their core business, while being reassured that the members of their pension scheme are likely to be better protected in the long term. Both stand to benefit from a well regulated regime.In addition, the ability of superfunds to deploy significant capital in the investment markets is also likely to be of benefit to the wider economy as trustees will look to have a well-diversified portfolio which might include investment in later-stage venture capital, or growth-capital for small-medium enterprises.These principles give clear guidance to government departments on conducting consultations. If you have any comments about the consultation process (as opposed to the issues which are the subject of the consultation), or if you feel that the consultation does not adhere to the values expressed in the consultation principles or that the process could be improved, write to: ), published in a summary of responses received and referred to in the published consultation report.All information contained in your response, including personal information, may be subject to publication or disclosure if requested under the Freedom of Information Act 2000.Trustees will also be required to notify are properly protected and a sensible and sustainable balance is struck between the interests of members, the sponsoring employer, and the superfund investors. This consultation seeks views on an appropriate legislative framework for the authorisation and regulation of superfunds looking to enter the market. Many of our proposals would require primary legislation and we will seek to legislate in due course when parliamentary time allows.In the meantime, we would expect any superfund considering entering the market to engage with Taskforce published a number of reports between March 2016 and September 2017 which included their view of the required regulatory regime and the potential benefits that could be gained from superfund consolidation. We consider that the current legislative framework does not prevent a superfund setting up and attempting to attract other funds to consolidate.
It would provide an incentive for employers to inject significant sums into their schemes to bring them up to being sufficiently well funded on a prudent basis, so that they can enter a superfund. Provided the right regulatory regime is in place to deter excessive risk taking, the interests of members and investors are likely to be more evenly balanced.However, there are clear risks in doing so without a suitable regulatory framework to ensure member protection. This government has chosen the third option to embrace innovation, and to proceed with what is a difficult but potentially worthwhile program to enable a properly regulated superfund consolidation sector. Diagram 1 sets out a very simplified structure of a potential superfund and should be viewed in this context. The capital buffer is furnished by capital provided by external investors (who expect a return) and/or the fee paid by ceding employers for entry to the superfund.There will of course be variations between the complexities of superfund structures depending on their business models. The capital buffer may be managed entirely separately to the superfund pension scheme’s assets.© Crown copyright 2018 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated.To view this licence, visit uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]